P2P radio morphing into free music search

Music start-up Mercora is dipping its toes into the trendy world of Internet search, with a new Web-based tool aimed at finding free music being played on the company's peer-to-peer radio network.

The company is expanding quickly from its roots as an innovative streaming Net radio service, in which it has blended much of the immediate on-demand listening of file-swapping networks with the legal framework of Web radio.

The new tool is aimed at appealing to a new audience of casual Web surfers, allowing them to search the Mercora network and listen to a wide range of songs that approximates on demand. Thus, a person might search for The Beatles and have two dozen or more songs instantly at their fingertips to listen to for free.

"Our strategy comes from the fact that there is no music search site that gives people the ability to listen to music immediately," said Atri Chatterje, the company's vice president of marketing. "Either you have the 30-second clip or a 99-cent download, or you have to go sign up for a subscription service. There's no immediate gratification."

That desire for instant, on-demand music has been a dangerous one for several generations of Webcasting companies, some of which have run afoul of copyright laws as they have added increasingly advanced features. Mercora is part of a new wave of companies that is pushing the boundaries of acceptable Net streaming services, providing as much interactivity as possible while remaining within the letter of the law.

Web radio companies are allowed under law to broadcast whatever music they like without asking permission, as long as they pay copyright owners about seven one-hundredths of a cent per song streamed. But that open-ended invitation comes with restrictions: Digital DJs aren't allowed to let listeners choose specific songs at specific times, aren't allowed to let listeners make permanent copies of songs, and have strict limitations on how many songs by a single artist they can play back to back.

Mercora has adapted to these rules with a peer-to-peer network that turns all its listeners into Webcasters, streaming music from their hard drive at the same time as they're listening. The service keeps track of what song is currently playing at any given time from each member, and allows listeners to search by artist.

As with any peer-to-peer system, the power of this model is in its numbers. With between 20,000 people and 30,000 people potentially streaming music at the same time, odds are good that a song from any given popular band will be on somebody's rotation, and the network can immediately switch a listener to that person's "channel."

The new Web search tool taps into the network the same way, searching the Mercora "now playing" list through a Web browser instead of through the companies' software application. Surfers who want to listen to any of the songs found still must download the software, however.

Chatterje said the company will soon be adding Google-like text ads to the search results, bringing another potential revenue stream into the start-up's coffers. The search tool will likely be expanded to include podcasts and songs from other Web radio sources during the next few months, he added.

As it expands to search broader music offerings online, the company could run into powerful opposition. Sources have said Yahoo is developing a new music search tool, although no details on those plans have emerged.

Mercora's increasing moves toward a nearly on-demand service have drawn scrutiny from Web radio licensing authorities, but as yet there are no indications that the company has gone too far.

"We're looking at their more recent offerings to see if they're in compliance with the (law)," said John Simson, executive director of SoundExchange, the group that collects and distributes royalties from Web radio stations. "We haven't come to a conclusion yet."